How long will Miami condos sit dark?
By Jennifer LeClaire

When the Miami condo market went bust with tens of thousands of units still vacant, it fulfilled worst case predictions of a skyline full of darkened buildings.

Market forecasters are now attempting a different sort of prediction: projecting how long it will take for the market to absorb the current inventory.

There are approximately 38,000 new condos either completed or being finished in Miami-Dade County. The MLS shows 25,116 condos for sale in the county. That's about a 42-month supply, according to McCabe Research & Consulting, not counting the condos that have yet to be finished.

But that's just one take. What are brokers, attorneys and others saying about the darkened condos that are troubling the local real estate economy? There is no general consensus in the market. Some are wildly optimistic while others offer doom and gloom.

Victoria Blintser, a broker at Rapid Realty in Aventura, is more optimistic than McCabe. She believes the turnaround will take 12 to 24 months.

"With property values in South Florida taking at least a 50 percent discount, reverting back to 2004 prices, most analysts agree that we're somewhere close to the bottom of the correction," Blintser said. "However, there's still a glut of inventory in the market."

A glut indeed -- and one so bad that some industry watchers are far less optimistic than Blintser and even more pessimistic than McCabe. Michael Ross, a partner at the law firm Greenspoon Marder in Fort Lauderdale, heading up the firm's real estate, finance and transactions practices, is expecting the worst.

"Many new condo units in Miami were purchased as an investment, not to put a roof over a person's head," Ross said. "Until demand catches up with supply, which in my opinion will be between five to seven years from now, units will remain dark."

Richard Swerdlow, CEO of Condo.com, disagrees. He said he's already seen more deal flow thanks to dropping prices and lower interest rates.

"We expect to see any remaining inventory still out there on the market throughout the first half of 2009," Swerdlow said. "Many of the condo buildings that are dark, so to speak, are turning to rentals as an opportunity. This is creating a lot of positive activity as there are many people looking for condos that are not in a position to buy right now."

From her position serving the luxury market, Rapid Realty's Blintser is noticing less desperation than even a month or two ago in negotiating short sales. That signifies that a much healthier real estate market is on the horizon.

"The banking system recovery, coupled together with drops in foreclosure filings and interest rates, gives us more of a positive outlook on markets such as ours in South Florida," Blintser said.

Trump mansion purchase highlights tide of Russian investment
By Jennifer LeClaire

Fertilizer billionaire Dmitry Rybolovlev's purchase of Donald Trump's Palm Beach estate for $100 million last week made him the most high-profile example of a growing stream of Russian buyers looking for homes in South Florida.

Wealthy Russians first began scooping up luxury properties in Britain, and are increasingly looking to South Florida's beachfront, according to local brokers.

Katya Hutton, a broker at RE/MAX in Coral Gables, said she is selling real estate to Russian investors every month. Word about the South Florida real estate "fire sale" has spread to Russian through Internet ads and owners of Miami Beach condos, she said.

Most of Hutton's clients are looking for one thing: oceanfront property.

"Russians love going to the beach," said Hutton, a Russian native. "We think it's healthy and a nice way to spend time with family. So Russian investors are looking for proximity to the beach, and those are usually high-priced properties."

Singer Island, Bal Harbor and Sunny Isles Beach are among Russian investor hot spots. Sunny Isles is known to many as "Little Moscow" because of its Russian restaurants, grocery stores, bookstores and dry cleaners along Collins Avenue.

Several new high-rise condos have sprung up in Sunny Isles Beach over the past few years, including Trump Towers, Aqualina, Ocean Pointe, M, Solé on the Ocean, Da Vinci on the Ocean, Solis Resort, Spa & Residences, and Fantasy on the Ocean.

As the inventory of high-rise oceanfront condos has increased, so has the Russian population in South Florida.

A 2006 U.S. Census survey estimated 125,000 people claiming Russian ancestry live in Miami-Dade, Broward and Palm Beach counties, a 19 percent increase since 2000.

Still, many Russians aren't making South Florida their primary home.

Victoria Blintser, a Russian native and president of Aventura-based Rapid Realty, said she shows Russian clients multimillion-dollar properties every week.

"In Aqualina, on any given day, every third person in there is Russian," said Blintser.

She said her clients enjoy visiting Sunny Isles Beach, which she calls the Brighton Beach of South Florida (after the waterfront Russian neighborhood in the New York City borough of Brooklyn). Canadian Russians tend to buy second homes in Sunny Isles, while European Russians are looking at investment opportunities, she said.

Russian clients want more than just a real estate broker, they want a concierge, Blintser said. Her clients expect to be catered to, and she often organizes yacht charters to the nearby Bahamas or even rental properties for $30,000 a month that people to try before they buy.

"Russians are not bargain shoppers -- that's for sure," she said. "If they have money to spend, they don't have time to negotiate. If they see something they like, they wire the funds and close. It's a much easier transaction."

Copyright TheRealDeal.com July 2008

Rapid Foreclosure Prevention

The foreclosure epidemic is putting a noticeable strain on our nation's economy. The problem is so serious that it is creating concerns of a possible recession in our country. Florida currently ranks #2, and has reported 21,035 foreclosure filings in the month of June alone, according to Realtytrac. The state's rate is currently one foreclosure filing in every 347 households. More and more homeowners are losing their homes, and Moody's economy.com forecasts that defaults won't peak until 2008 due to ARM reset and falling home prices.

The problem stems from the fact that there are $2.5 Trillion of adjustable rate mortgages (ARM) that are starting to reset this summer moving forward. The end result is the amount of foreclosures in the market place is at an 11 year high, and is forecasted to affect over 2 million homes over the course of the next two years.

A growing number of homeowners find themselves in a very serious and complicated situation. Large number of borrowers over the last several years have financed home purchases using mortgage teaser rates of 1-2%which are now resetting to 9-10% As an example, if someone's mortgage payment was at $1,400, it is now at $2,500 per month. Coupled with the fact that we're encountering a very serious real estate correction most consumers are finding their house's value currently below what they paid for it.

"The Rapid Recovery Program is a very unique program," says Victoria Blintser, President and Broker/owner of Rapid Realty, Inc. "It brings together skills in real estate loss mitigation, refinancing expertise, counseling when necessary, and real estate brokerage with specific emphasis in the listing and selling of foreclosure properties for individuals and banks."

"We do have solutions to these problems," says Victor Salerno, Rapid Realty's Vice President of Sales, "the systems we use allow us to work with lenders to create a negotiated solution that benefits the banks and allows or may allow the borrower to rebuild his credit situation."

We just sold a property that had a market value of $300,000 for $200,000 and the bank took a $100,000 discount. We have multitudes of scenarios like that," says Victoria Blintser.

Rapid Realty is a full service Miami-based real estate brokerage that has positioned itself in the marketplace as the premier real estate foreclosure experts dealing with residential, commercial, pre-foreclosure and banked owned properties. Homeowners get the help they need to deal with unfortunate circumstances in their lives, while investors looking to expand their real estate portfolio have access to a significant inventory of wholesale valued properties provided by Rapid Realty.

Contacts:

Rapid Realty, Inc., North Miami Beach, Fla.
Victoria Blintser,(954)599-0121 ext. 205
vblintser@erapidrealty.com
www.erapidrealty.com

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